Final answer:
When magnetic dipole Y is placed near fixed magnetic dipole X, it will move toward X and rotate to align its poles with the poles of X, according to the principle that magnetic dipoles tend to align with magnetic fields.
Step-by-step explanation:
The question discusses the behavior of magnetic dipoles when placed in the vicinity of each other. If magnetic dipole Y is free to move and dipole X is fixed, when dipole Y is introduced into dipole X's magnetic field, it will experience a force due to the magnetic field created by X.
Magnetic dipoles are akin to tiny bar magnets with a north and south pole and, when placed in a magnetic field, they will align with the magnetic field lines.
This behavior is guided by Essential Knowledge 2.D.3 which states that a magnetic dipole tends to align with the magnetic field vector.
Hence, dipole Y will not only move toward X (if the opposing poles are facing each other) but will also rotate such that its poles align with the poles of dipole X (north to south and vice versa).
Therefore, the correct answer is: C. Move toward X and rotate.